Navigating to the Top: Corporate Leadership, Board Governance and Diversity

An Interview with David Chun

Navigating to the Top: Corporate Leadership, Board Governance, and Diversity

Abraham Kim:
This is Abraham Kim, your host of the Korean American Perspectives podcast. Today I am fortunate to have as my guest David Chun, CEO and Founder of Equilar. A top industry leader providing important data for board and executive recruitment for major corporations around the world.

Abraham Kim:
With Equilar’s unique role as a principal data provider for global companies to find top executive talent, David has vast understanding of trends in senior leadership within numerous different sectors. If you are an Asian American professional with aspirations for the C-Suite or perhaps a public board room, today’s podcast has a lot of important nuggets for you.

Abraham Kim:
In today’s interview with David, we talk about, first, the efforts to increase C-suite and board diversity taking place across the country, and what it all means for Asian American leaders. Secondly, we also discuss what are the important factors that many Asian American often overlook but critically need to nurture in order to reach executive leadership positions. Thirdly, with the current COVID-19 crisis, we address leadership in times of uncertainty. David shares what important lessons he learned when he started Equilar during the last global economic downturn. And then finally, I got him to share the one book that he believes that all CEOs, or people that aspire to be CEOs, must read.

Abraham Kim:
We hope you enjoy this honest and engaging conversation with David Chun about his life, his company, and how Asian American professionals can prepare to reach the highest levels of private sector leadership.

Abraham Kim:
Welcome to the Korean American Perspectives. We have David Chun in the house and we are so happy to have David, my friend from San Francisco, the CEO of Equilar. Welcome David!David Chun:
Thanks. I appreciate the opportunity on the podcast series.Abraham Kim:
I’m so excited because we’ve been following your career and also the important work you’re doing on board diversity and trying to input diversity in the C Suite, and I’d love to get into that part of our conversation today. But before we do, why don’t we start from the beginning. I understand you were born in Korea and you immigrated to the United States at a young age. Could you share a little bit with us about your family’s immigration story?David Chun:
Yeah Abe, happy to do that. And before I talk about myself, I also wanted to thank you for your leadership. You’ve been a breath of fresh air and all the innovative things that you’ve been doing for CKA. So I wanted to take a moment to thank you for that. But yeah, so our family, we had kind of a unique story. Our ticket out of Korea was that my dad was able to get a scholarship to get his MBA at Fairleigh Dickinson University in New Jersey. So it’s a small college there. But that was our way of getting out. And this was in 1967-68, so I was all of seven months old. when I got on a plane to JFK with my mom. I came first. So we grew up in New Jersey, so Fairleigh Dickinson, at the time, had a campus in Rutherford. And yes, my dad was able to get sponsored to get his MBA. It was kind of a random act of kindness where he helped a FTU professor that was teaching in Korea, like in a rotation program back in the 60s. And my dad helped him and his wife out and the wife remembered that and somehow was able to say, “Hey, we should sponsor him.” And my dad’s family came, you know, he grew up down in Gwangju, Jeolla-do, over by the sea. Very rural, poor-area in Korea. And so we were very fortunate. As we all know back in the 60s, Korea was not the robust economy it is today so any opportunity to be able to come to the States. My dad was able to come here and that’s what brought us to the States in the 60s.Abraham Kim:
After growing up in New Jersey, you decided to study engineering at UVA. and why did you choose UVA as your college?David Chun:
Yeah, so when I graduated from high school in 1985. At the time, there was an article that I read the New York Times right before having to select schools and the three hottest schools, in the early eighties, were Stanford Brown and UVA. I had a chance to visit UVA. For those who’ve had a chance to visit the campus, it’s a beautiful campus. And the other reason I picked UVA was that quite honestly, I didn’t know what I wanted to do coming out of high school and going to a place like UVA, having different schools, you had some flexibility. I’m probably one of the few individuals that actually starts off as liberal arts and then transferred actually into the engineering school, as opposed to the other way around. Because candidly, coming out of high school and also at college, you know, I was never a big writer, so all the stuff you’d have to do in a liberal arts program certainly didn’t appeal to me. And so I said, “Well, you know, I’m pretty good at math.” I said, “Hey, why don’t I just go do engineering and, you know, figure it out later.”Abraham Kim:
So you, you left UVA and you went and you had this journey. You went to Bain as a consultant. Then you went to Keenan Systems, which is a software company. I mean, walk me through that career pathway. Why did you choose those companies? And then you eventually ended up in an MBA program at Wharton.David Chun:
Yeah. So coming out of school, so this is 1989. Kind of was still okay at that point, hadn’t fallen apart. And candidly, I was fortunate enough to get a job with Bain, I hadn’t known much about it, it was one of the last companies I had interviewed with. And then once you get to meet people, you’re like, “Wow, these are really smart people.” Had a great experience, made a lot of good friends coming out there. You know, Dave Nguyen and I, we still see each other a couple of times a year having worked at Bain together and it was a good experience. I’ve learned a lot. However, about a year after I joined, Bain almost went out of business and they had a massive layoff. And you know, the group that I started with, over half of us got laid off after the first year. So that was a very valuable lesson, right? You never take anything for granted. It was very humbling, right? You’re a year out of school, you get laid off. A year ago, you had all these offers for all these different jobs. Now you had to file for unemployment, not unlike what we’re going through right now. Right now, it’s a hell of a lot worse. But it was an interesting, a very challenging period personally. But thankfully, having that Bain experience, there were definitely a couple of opportunities I was able to get. I decided to go to Keenan Systems because it was a software company. It was in Boston, and I figured, “Okay, I got my engineering degree, let me put that to use for a bit.” I knew at some point, I’d go back to business school. And so that was a good experience for about a year and a half or so. Went to Wharton, got my MBA. And after having done consulting, I think I realized that was not what I wanted to do long-term. And I felt like, “Okay, you know, let’s go give Wall Street a try, give it a shot.” And I was fortunate enough to get a summer internship at DLJ, Donaldson, Lufkin & Jenrette, and then joined them full time after a business school.Abraham Kim:
And then you shifted to an entrepreneur endeavor. And you decided to establish Equilar as an entrepreneur. How did that idea come about? Did you do this by yourself or did you have partners with you?David Chun:
Yeah, so in 1997, right after Netscape had gone public, right? This is the dot.com era. So DLJ at the time wanted to open an office in Menlo Park on Sandhill road, you know, with the venture capital community. And they had asked me to move out with a woman who now runs Oracle, Safra Catz, to open up the Menlo Park office. And initially, you know, my wife and I, we both grew up in the New York area. I grew up in New Jersey. She grew up in Queens, you know, Stuyvesant high school. You know, your typical bridge and tunnel couple. Never thought we would go West. You know, everybody in California, they’re crazy, there’s earthquakes, there’s fires– which is true, but you know, it’s a beautiful place to live. And so they said, “Hey, go out there for a year. If you don’t like it, we’ll move you back.” And so Lillian and I had just gotten married and let’s give it a shot and let’s see how it plays out. So we moved out here in 97. I immediately fell in love with living out here. 23 years later, we’re still here, raised our family out here and love every moment of being out here. I’m here in Silicon Valley in 97-98, working with a lot of startups, meeting VC startups and what not, getting pretty deep into the ecosystem here. And, so, you know, right. We’ve just gotten married. We just had our first child, Isabelle was born in 98, and I knew I was not going to be an investment banker for my entire career. And I said, “Okay, what are our options as well? You know, let me give this entrepreneurial thing a shot.” And having interacted and watched and gotten to know a bunch of entrepreneurs, I said, “Well, can’t be that hard.” So I took the plunge in 2000 and that’s how things got started. So how we got into it: I spent a lot of time as an investment banker going through SEC filings. And it occurred to me after doing that for five, six years is that there’s just a wealth of information that’s out there that people don’t even realize. And I said,” Hey, there’s gotta be an opportunity to mine this data.” And what ended up happening in 98, the SEC launched the Edgar system. And so right now, as we all know, getting a 10K or an annual report, it’s pretty easy. You go to the SEC’s website, you can download that. But when I first got into the business in 93-94, Edgar didn’t exist. The web wasn’t around. So now that this data was much more readily accessible, I said, Hey, there’s gotta be an opportunity to monetize this and build the business around it. That’s what led me to go off to start Equilar in 2000.Abraham Kim:
So was the initial focus on executive pay or was it just general information about individual companies that came out of the Edgar system?David Chun:
Yeah, so the original idea– and you know, I can laugh about this now, but it wasn’t funny when we were doing it–was to track IPO data. So keep in mind, I left DLJ in February-March of 2000. So this is literally the peak of the dot.com bubble, right? This is as frothy as it could get. And then the market just fell apart in April. So our original plan when we left was to attract IPO data. So companies that are not public can just build a deep rich database around IPOs. And what ended up happening was we built a great product, but the market moved away from us. And so the feedback from everybody was like, “Well hey, when we do IPOs, we’ll talk to you.” But then as we all recall, the IPO market shut down for about two years. But one of the things we tracked out of IPO filings was the compensation data. And when we started talking to some people about compensation data, everybody’s eyes lit up. I initially was just like, “Hey, I understand you may be interested in that stuff, but I don’t know anything about executive compensation. This is not really what we signed up for.” However, so fast forward, we’re now in 2001, 9/11 hits. And I happened to be in New York City, when all that was going on. And at that point, I realized we were either going to shut down the company at that point or there’s this interest in this compensation data. Either we go deep on that or we go home. And so I had a lot of soul searching, a lot of naval gazing at that point and I said, “You know something, what the hell. I’m not an HR, I’m an investment banker but if this is what the market wants, let’s go out and build this. Let’s see what happens.” So we quickly pivoted at that point and got our product up by the end of 2001. We just happened to be at the right place at the right time. And that’s when the whole Enron scandal blew up. That’s when Arthur Anderson, you know, candidly went under and then you had a bunch of other corporate scandals come out in 2002, like Tyco, WorldCom, Adelphia. And so that’s really where the modern corporate governance started. And we just happened to be the right place at the right time. And our big break in 2002, we got a call from a reporter of Reuters. Tim McLaughlin. I distinctly remember the call. He’s like, “Hey, I heard you have compensation data.” I’m like, “Yeah, sure. Well, what do you need?” He’s like, “I need to find out what did Mark Schwartz, the CFO of Tyco make last year when he was CEO in 2001.” So we pulled the data, emailed it over to him and said “I’m assuming the number’s about $51 million.” And so then the next day, you know, across the wire, according to Equilar, an executive data provider, Mark Schwartz made $51 million as CFO Tyco last year. It’s like, “Wow, that was pretty amazing.” So that kind of helped, for lack of a better term, launch us into this whole space and helped us establish a bit of credibility there.Abraham Kim:
So this was your first entrepreneurial endeavor, wasn’t it?David Chun:
First and most likely only.Abraham Kim:
So you bring up an interesting point. You started your company during a very turbulent time in the economy and especially in the IT world. I’m sure reflecting back, especially where we are today, you probably have some advice for entrepreneurs who are kind of living through the current era of what you were going through during those early 2000 years. Are there any words of wisdom you would pass on?David Chun:
Yeah, everybody, as you can imagine, many people are freaking out right now and I hate to say this, but rightfully so. Because this downturn we’re going through right now, nobody has seen anything like this before, right? 17 million people filing for unemployment over the last three weeks. First and foremost, you got to get your cost structure in line. You just got to rationalize it and just get it down to the bare, bare bones. As we all know, the curve will flatten at some point. The key is to make sure the lights are on when that opportunity opens up. And so having access to liquidity, I mean, at the end of the day, what’s killing everybody with coronavirus is no oxygen getting to the lungs. And for businesses, it’s cash, you know, having enough liquidity to keep the lights on. So without question, this is where you need wartime CEOs to quickly assess what you need to keep the business afloat and both from a liquidity standpoint and also just looking at your cost structure, make sure we can get to the other side.Abraham Kim:
Your business is essentially information, the selling of information. And in this era of where information is so prevalent, how do you make a business out of information? Yeah, it seems like people, I would imagine, especially something like executive compensation, something like that is really, it’s episodic, right? It’s not like regular financial data that’s coming out that people are looking for on a constant basis. What’s the secret sauce there in terms of being able to sell this important source of data, which is really needed at more episodic periods of time?David Chun:
Yeah no, that’s a great question Abe. I mean, it is the data business, right? There’s so many free resources out there, you have to have a high quality product that’s differentiated that people are willing to pay for. And so our data sources on the compensation side, there are two primary sources. One, as I’d mentioned, we’re mining SEC filings. We’re going into the annual reports, the 10Ks, extract that information. Also throughout the year, as compensation data becomes available through form filings, AK filing– starting to the weeds of this but the point I’m trying to make is that there’s what they call real time information available around comp. The other major source of data though for us is that we do a proprietary survey where companies give us information that’s not publicly available. So to take a step back, we approach companies like GE, ExxonMobil, Facebook, and others where they give us information on compensation for senior executives that’s not filed in an SEC filing. So not many companies can walk up to these companies and say, “Hey, can you give us this information?” Like, why the hell would we give that to you? So we’ve got a unique model where companies are giving us information and then we aggregate that and then we sell a service that allows them to access that information on an anonymized basis of other companies across their industry and geographies. So at the end of the day, we’ve got a pretty unique data set that we offer that includes both public and nonpublic information. And the reality though, take in a step back, compensation data, you know, you’re literally talking about decisions that involve millions of dollars at stake for each executive, right? And also these compensation decisions are incredibly scrutinized by investors. And so you pick up the newspaper and you’ll, you’ll read about these CEOs that are making these pay packages where the companies aren’t performing as well. And needless to say, the largest shareholders like a BlackRock, Fidelity, and others, they’re not happy. And now they’re allowed to vote on these types of things and this feedback gets back to board members. And so at the end of the day, we offer a pretty unique solution for decisions that involve literally millions of dollars that are at stake.Abraham Kim:
You mentioned you have these special relationships with these multinational corporations and large companies. I mean, what’s the incentive for them or the reason for them for willing to share this information with you and knowing that you ultimately will be sharing this information with a broader community?David Chun:
Yeah. So what they’re able to get is a much more accurate view on compensation. So because by participating in what we call a survey here, they’re able to see on an anonymized basis, like okay, here’s a much more accurate view of what — so not to get too far into the weeds, but the SEC requires a company to disclose the pay of the five highest paid executives, always the CEO, CFO. But those next three roles can be the head of HR, the head of sales, head of marketing, but it’s not always the same three across companies. And so to be able to accurately figure out, okay, what should we be paying our chief marketing officer, they want to be able to have access to not only what’s publicly available because what’s publicly available would be skewed higher because you’re only pulling the chief marketing officers that are of the highest paid. But by using our survey data, we’re looking at a much more holistic view of what a chief marketing officer is getting paid. Cause it’s pulling in a combination of what’s publicly available and what’s not publicly though. Hopefully that’s making sense.Abraham Kim:
Yeah, it is. But oftentimes industries are different and sometimes it’s comparing apples and oranges. How do you normalize that across industries and how do different industry leaders look at all this data?David Chun:
Yeah, so one of the big benefits of our platform is that companies can cut. They can run different reports, whether it’s by geography, by size, by industry. Because the thing that I’ve learned about this business for having done work around compensation for 20 years around executive comp is that there is never a right answer. Everybody has an opinion and everybody feels right. But as you know, it’s an incredibly emotional decision, right? Because the executive he or she may feel she’s underpaid but everybody else feels he or she is overpaid. And then when you look at that as the multiple of the average employee and then when you look at that pay versus an athlete or a musician or an artist, it’s such a fascinating area because there really is no right answer. As you find out Abe, is that when you look at compensation, there’re so many different ways of cutting it. That’s the reason why there’s a whole ecosystem in a whole industry that looks at this. Because there’s so many different ways and opinions around it.Abraham Kim:
I’m curious. Of all the industries that you observe, which industries are some of the highest paid executives?David Chun:
Yeah, I think without question technology, without question, entertainment. We did an analysis for the New York Times when Les Moonves stepped away from CBS and over his 10-12 year career, walked away with over a billion dollars. But you know, those industries, there’s a big competition for talent. I mean, it’s so critical having the right people leading these businesses can make all the difference in the world. I mean, these are businesses where the assets are the human capital, right? And, that’s why the ones who are producing and are effective are candidly worth so much. But you also gotta keep in mind, this is information, we’re talking about just, public company executives. There’s so many other industries that frankly never have to disclose your compensation. You know, for example, somebody runs a hedge fund or whatnot, and they’re making hundreds of millions if not billions of dollars. And the big question is “Okay, who’s worth more?” Right? And that’s the reason why you see these numbers where some of these executives who are running public companies could easily get picked off to, to run a PE-backed company and frankly could make more with less headaches.Abraham Kim:
We read a lot about gender disparity in terms of pay, as well as a disparity among ethnic groups as well. Do you see that condition getting better? Is there more quality you’ve seen in recent years or do you still feel that there’s a significant disparity between– let’s look at gender first and then among other ethnic groups?David Chun:
Yeah, I mean the reality is we don’t have enough data points. It’s a great question and we are going to look into this more later this year. On the gender side, every year we look at women CEOs versus men CEOs and we show that women CEOs on average make more than the men. But the reason that it’s the case is there just aren’t that many women CEOs and the ones who we happen to have, you know, they tend to be running bigger companies. So the challenge we have right now is really having access to some of the deeper data to be able to do this. We don’t have the ethnic data, off the top, you know, we don’t have that readily available. We are actually in the process of capturing some of the ethnic data later this year. We’ve got some interesting initiatives on that front. But on the gender piece, like I said, we’ve looked at it for CEOs and we’ve shown that women’s CEOs make more. But like I said, it’s when you look at the number of data points, it’s frankly not fair.Abraham Kim:
So essentially you’re saying to begin with the universe of data of let’s say, male CEOs are so much larger than how many CEOs that are women and that universe is so small. But those women who have attained that leadership are a small group and they tend to be leaders of very large companies and they’re very public figures, right?David Chun:
Yeah, exactly. So they’re running much larger businesses and hence I think it was for a Fortune 500, roughly 5% are women CEOs and those five, those 25 roughly right, are running larger businesses on average.Abraham Kim:
How about in terms of representation among ethnic groups. Are you seeing an increase in minority CEOs, taking on those Fortune 500 companies? Or do you see this as a shrinkage or a flattening out in recent years?David Chun:
Yeah. I don’t have the hard data to support that, but just anecdotally, definitely seeing the API community having major strides and looking at the major tech companies, right? And the Indian community there. You’ve got Satya Nadella running Microsoft, you’ve got Sundar running Google alphabet. And then you’re also seeing a number of Asian Americans who are founder-led companies who are running major businesses. So, take Eric Yuan running Zoom, right? And you got Ken Xie at Fortinet, and others. So you’ve definitely seen the API community making major strides in leadership roles. But, you know, frankly, a lot of that’s several of that is through founders running their own companies that have been able to go public.Abraham Kim:
So, I want to take a slight little shift here and focus on, just perhaps extracting from your experience of having been a CEO for a number of years, actually a number of decades. So if you were mentoring mid-career professionals and they wanted to reach the corporate suite level someday, what would you advise them to do to invest in their lives or in their training to prepare for that role?David Chun:
Without question, build your network. I think we as Asian Americans, our parents always drilled into us, get good grades, study hard, study hard, right? I think what people underestimate is that so much of the business world is networking and befriending people above you, getting to know people around you. One is obviously to do a good job of what you’re doing, but, you know, also get out of your office, go out and meet people, force yourself to go to those, you know, happy hours and whatnot. So much of what I see out of the business world, going back to my experiences back at Bain and DLJ and others is really finding good mentors along the way and staying in touch with them and just building those networks.Abraham Kim:
So networking is an art form. It’s a science and an art form, right? It’s a numbers game. You just got to go out and meet people, but it’s an art form as well. How did you learn how to network and just stay connected with people and build out your community of supporters?David Chun:
I go back to my high school years and I was fortunate enough to be one of my friends, an incredibly successful businessman and continues to be today, even into his eighties. And one of the things I was fortunate, like, you, you don’t know what you don’t know. Right? And I think one of the great things CKA does is having mentor events around the country, right? If you don’t get out of your bubble and start to get challenged and recognize what’s out there. And one of the things that I distinctly remember from my friend’s dad, He’s like, later in life joined YPO. What is YPO? YPO is the Young Presidents Organization. And, so when I had the opportunity where I could qualify to join it, I immediately tried to join. And thankfully I did. And I’m so glad that I went out there and did it. But by spending time with the individual’s name is George Keller, and by getting to know Mr Keller and learning from him, what was part of his career. I think that is something that if more people could find people like that, and get to know them and learn from them. And I don’t know, I just realized that so much of the success of us for Equilar and we’re launching a new product right now and a lot of the calls that we’re having are based on people I’ve gotten to know over the years and I’ve stayed in touch with and whatnot. And so, like, frankly, a lot of folks I worked with back in my DLJ days. And, so I think, you know, one is getting to know people and then two is really, you know, cultivating and nurturing those relationships and really making efforts to stay in touch with people, help helping people out when possible. But it’s just something where one thing I’ve learned is if you’re always looking to give and to help people later in life, if the need ever arises, people will be more than happy to help back. So I think recognizing that the seeds that you’re planting today, may not, ever bear fruit but later in life, they could. And so if you’re always in kind of a giving mindset of being able to help people out, they will inevitably as long as you’re genuine about it, I think you’ll be surprised at how helpful people will be down the road.Abraham Kim:
Yeah. I can’t agree with you more. I mean, I’ve had situations where I was, maybe a lone intern with another lone intern in my early days and 20 years, hence we stayed in touch and that person becomes, you know, a CEO of a company or became my principal client on the other side of the table. And it just, you would’ve never guessed that, right? But these relationships and people we invest in, ultimately, who knows, becomes wonderful colleagues in the professional world. We lift both of us up, right? It’s win-win victory through those relationships.David Chun:
Exactly. You look back at the people you graduated from college with. Your first jobs and where are they all today? Like you said, with DLJ getting sold to Credit Suisse who has an amazing diaspora of individuals and keeping in touch with them, getting together at least once a year for dinner and all these types of things, which has been a lot of fun.Abraham Kim:
Yeah. Just in your comments, I just wanted to highlight two important things. One is obviously we had just talked about investing in friends and people in staying in touch and following up, but also Mr. Geller, who played an important role model in your life, and finding great role models, successful people like that, and then emulating or just watching their lives and see how they were brought into success and just learning from them through their lives. I feel like that was an important part of your mentorship, as you were growing your own career.David Chun:
Yeah, exactly, because like what I love to say is you don’t know what you don’t know. I was very fortunate enough that Mr. Geller kind of took me under his wing and gave me some pretty good advice. I mean, here’s another lesson. They had a vacation home up in the Berkshire Mountains, in upstate New York. I remember we went for a run together and we were going back to the general store in their neighborhood, and he was returning a Snapple bottle, for the 5 cent deposit. And this guy clearly didn’t need the nickel, but he just said, “Hey, every penny counts,” and it’s little things like that. Wow, pretty humble guy with little life lessons along the way.Abraham Kim:
I wanted to also connect this to your own success over the last 20 years. Obviously Equilar has grown tremendously since those early days in 2000. What do you think was the, aside from the important lessons of life and applying them in your career as a CEO, what do you think was the secret of your success?David Chun:
Wow. What would be the secret of success? I mean, hard work is one, luck is two, but I think also listening to our customers. Listening and understanding the market needs and just really making sure that the products and the service and the support are optimized to meet their needs. And we’ve had competition as many businesses do over the years, so just making sure to never get complacent, right? Never to assume things will be fine. So it’s just having the focus on building that out. And I’m super excited about our new product and that in this market, but still, feel that we’re hitting on a major pain point for many companies out there. And so we’re keeping our heads down and just executing this market.Abraham Kim:
As a CEO, any great books you’ve read recently that really helps you in your leadership?David Chun:
Recently, I’ve been becoming a huge fan of Audible. I cannot say enough. You know, if you’re not using a lot of Audible, you should try it out. I just got to listen to Samsung Rising, listen to Steve Schwartzman’s book and Marc Benioff’s book. So all of those I’ve been able to listen to recently, oh, and Renaissance Technologies. James Simons, that was a really good book, The Man Who Solved the Markets. But I think from an entrepreneurial standpoint, I would say the number one book I would recommend, though it wasn’t necessarily recent, would be Ben Horowitz’s book, The Hard Thing About Hard Things. And he started LoudCloud Opsware, going through the dot-com burst. As many of you know, he’s the co-founder of Andreessen Horowitz, but without question, if you talk to entrepreneurs and CEOs who read books, and if they’ve read that book, that typically gets the top of the list.Abraham Kim:
I actually have the book on my bookshelf. I haven’t had a chance to crack it open. If we can pull out one important insight from that? What would that be from that book?David Chun:
Well, I think it’s along the lines of what I was just touching on a second ago. There are really hard decisions as a CEO, especially in this downturn, that he had to go through where he had to sell off a part of business, lay off people, and how it’s lonely at the top and how you’re going to get criticized for it. You’re going to get attacked and all these sets of things. And that if you don’t have the intestinal fortitude to handle that, then you shouldn’t be a CEO. And all businesses, most businesses, will go through a downturn at some point in their cycle and we’re gonna have to work hard right now, right? And we’re going through our third right now. We survived the 2000- 2001. We survived, 2008-2009. We’re going through it again now, obviously with COVID-19. So, I think that’s a book. If anyone who’s thinking about becoming an entrepreneur, becoming a CEO, I would strongly recommend you read it. And many people as we all know, we’re very optimistic about it, right? Like, “Oh yeah, it’s not going to be a big deal. I can handle it,” and you know, you probably can. But if you really go into that book with your eyes wide open and really listen and really understand, “Okay wow, you know, put myself in those shoes, can I handle that? Can I handle that?” And that’s something that, like I said, he does a phenomenal job. Everyone who’s read it, who’s been through a downturn, it resonates so well with them. I mean, it hits all the cords, all the nerves, and it goes to them. I would also say the other great book that one of his other partners wrote is Scott Cooper’s book, he wrote a book, Secrets to Sandhill Road. So those are two great books. But, I would read Ben’s first. No disrespect to Scott, but Ben’s a great book.Abraham Kim:
Great, I’ll certainly pick that up very soon. Ben Horowitz’s book.David Chun:
You’ve got plenty of time now, Abe!Abraham Kim:
And I’ll listen to it on Audible, too. One of the priorities that your company is pursuing is to help corporations diversify their boards. Why is board diversity important in your opinion?David Chun:
You know, “diverse” is not important just for the sake of diversity, but by having diverse opinions and experiences in a boardroom, it ultimately leads to better decision making. And it helps, which ultimately will lead to better returns for an organization. And when you have a homogeneous set of board of directors that have had all similar experiences, candidly, you’re gonna have blind spots, right? But by having women, people of color and other diverse aspects bringing into the board room, they’re going to be able to share experiences and help the decision making process that will ultimately lead to better outcomes for that business. And that’s why there’s a big push by the investor community to have a greater diversity in the boardrooms. That’s the number one, you know, probably just having different opinions to be able to share around that. But there’s also an important other part of it, and it’s not as much of an issue now than it was, let’s say a month ago, when the unemployment rate was at three and a half percent, but in what was formerly known as a “war for talent”, having visible diversity, having more women, more people of color, was helping companies that to attract talent. And so those businesses, if you’re a woman and you look at the leadership team and you don’t see any women on the leadership team or on the board directors, you’re probably gonna feel it’s probably not as friendly for women to go there. Like I said, this was an issue about a month ago. We’ll see when the unemployment numbers fully come out for the next couple of weeks. It’s probably not going to be as big of an issue as was earlier, but having that diversity is important for businesses longer term.Abraham Kim:
What industry does it well in terms of diversity in their boardroom?David Chun:
Industries that do it well? Off the top, well I would say, rather than industries, I’m going to focus on states. California, cause it’s hard. The fashion industry, yes. Because, you have more women in that and whatnot, in retail would probably be a bit higher than let’s say others. So it’s hard enough to say that one industry doesn’t do necessarily well, but I do want to say in California, as many of you know, they passed a law out here and we just published something recently on that. Before the law, of the 50 States, California was, I want to say, about 30th or 35th. Now, a year and a half later after the laws been passed, to get more women on boards, we’re up to about 15th but we’re not in full compliance yet. And then once every company is in full compliance, California would actually jump to number 2. And so California, while there’s been a lot of controversy of having quotas here in California, it’s definitely made an impact in moving the needle. And the only reason we’re not number one is because we’d be behind New Mexico, which has only one public company. So, California has done a phenomenal job of helping to move the needle there.Abraham Kim:
So if a company recognizes the importance of diversity and perhaps their board has been somewhat monolithic in terms of the folks that are sitting on the board, what do you advise these companies to do? I know you’ve said that board diversity is more than just checking a box. In fact, it’s a paradigm shift within the company and the culture as a result of moving toward greater diversity. What do you advise companies if they come to you and say, “You know, David, we want to be a more diverse and representative company.” What do you recommend them to do?David Chun:
Yeah, I think the end of the day, board recruiting and succession planning, it’s an interesting process. And at the end of the day, I think companies definitely want to have more diverse representation in the boardroom, but they also want to be careful on who they add to their report. And so as part of that process, they need to go beyond their networks to find the diverse candidates. But, they also want to make sure — it’s an interesting balance there. Okay. I want to go find some people, but I also want to be careful who I bring into the boardroom. And so this is where, if you don’t mind, I’m going to digress to talk about what our product does, but our product actually tracks the networks of people so that you’re able to be able to back channel somebody and say, “Okay, before I talk to, let’s say Susan or Mary, whoever, let me see within my network who might know them.” Because it’s an awkward process to start talking to somebody about coming on the board and then find out at the 11th hour like, oh man, you don’t want to bring that person on. So I think that’s something where I think companies can do a better job of being able to rely on; tap their networks to see who within their community could potentially know somebody who would be a good fit and to be able to take advantage of that, as part of the process.Abraham Kim:
So, if Asian Americans and Pacific Islander professionals would like to get into a board of a fortune 500 company, what would you advise them to do to prepare for this? Obviously, it’s not something that you can do over a month or so. It’s something that would take quite a bit of time to prepare to be recruited into such a role. Correct?David Chun:
Yeah, absolutely. And I think that’s a mistake that a lot of people make, is that they wait too late. They approach retirement and they say, “I’m going to look for a board seat now,” and at that point, it’s honestly, especially in this environment, it’s way too late. People need to be building their board networks well before they are ready to join a board, and that’s looking at people in their network who are sitting on boards today and spending time with them. Whether it’s meeting them for breakfast or going to events with them or what not. So it’s without question, I can’t stress enough. You gotta start building your board network and you gotta start building it now, well in advance of the time you think that you’re going to try to board. I mean, you have search firms like Russell Randall’s and Spencer Stewart and others that are helping to place people on boards, but that’s such a small percentage of the number of board seats that are filled through search firms. If you’re an executive at a public company, a great way to start building your board network is spending time with your own board and to be able to go into your own board and be part of that discussion. Be knowledgeable about governance matters. There’s a whole host of issues around corporate governance, around public company issues and so the more you can get smarter on that, plus start building people, who can potentially help on your board journey, that’s part of the process.Abraham Kim:
You spoke of an informal process, which is building network and friendships and just telling your colleagues who are on boards that you are interested in eventually becoming a board member. Is there a formal training aspect of this too, to consider?David Chun:
Yeah, I mean, there’s tons of resources out there around, for lack of, we’ll say “formal training”. So in Washington DC there’s NACD, the National Association of Corporate Directors and then they have chapters all around the country and there’s programming throughout the year. Well, there used to be, before shelter in place, and then there are other organizations, including ours. I mean, we do our own board leadership forum and our comp committee forum and stuff like that. And there are in-person events. There are universities, like Stanford, has I think the best program– Stanford Directors college. They’ll get 300 people at Stanford Law School around for three days around board education. You know, the classroom training and the programming, it helps. But really, the more to the extent that you have an opportunity to learn from your own board or to potentially join another board; I mean, another way to approach this is to get involved with a nonprofit board and especially nonprofit boards that include board members who have public company experience. And you know, in my situation on the Asian Pacific Islander board, some of the board members there, have sat on, or currently sit on other public boards. And I’m not personally joining a public board for now because of conflicts of interest as we work with so many of these other companies. But you know, if you can find a nonprofit board that includes board members who sit on public boards, it’s a nice way to start learning from them so that when the opportunity arise, you’re ready for that.Abraham Kim:
I think, for those who are not as familiar about corporate boards, could you tell us why people would want to be on a board? Why business leaders are looking for roles in various companies? Is it the prestige factor or is there something else involved here?David Chun:
Yeah, I mean, there’s definitely a prestige factor to it without question. There’s also a compensation aspect to it. I mean, if you’re on a Fortune 500 board, just one board alone for a “part-time job”, it pays about $300,000 a year, so it’s not insignificant. But the other reason why people want to join boards, especially for somebody who’s ready to retire from their full-time career, it’s also a nice way to stay mentally engaged. It’s a nice way to feel like you’re also potentially giving back and to be able to mentor and help other businesses and whatnot. But the reality is that, I hate to say this, but I think there are a lot of people who look to join boards, honestly, for the wrong reasons. Especially in the public world, being a public company board member isn’t –, yes, the prestige doesn’t go away, the compensation continues to go up a little bit each year. However, it’s become a lot of work and it’s not like what it was 10, 15, 20 years ago where you go and hang out at the country club and then rubber stamp a couple of things and move on. In today’s day and age, when you have activist investors, you’ve got an institutional investor community, they’re taking a much more proactive role in voicing their displeasure with board members and whatnot. So, I think people need to understand and not underestimate the amount of work that’s going to be involved. How much of public boards may not be the right fit, so maybe a private board, nonprofit boards; so, you need to understand there are trade offs and I just want people to understand that.Abraham Kim:
But most people who join boards are not near retirement. You see folks who are on boards in the middle of their career. In fact, you find often sometimes CEOs of other organizations part of these boards. Why would they join boards?David Chun:
Yeah, many companies have different philosophies on that. Certain companies, as they think about CEO succession; let’s say you got the CEO and you’ve got two or three executives that are reporting into the CEO. Certain companies want those individuals to go sit on another board because then they’ll see how other boards operate so that when they’re ready to potentially become the CEO of their own company, they’ve had that experience of understanding that dynamic between the CEO and the board members. So, it’s actually good training in that regard. However, you don’t want to have these executives sitting on, let’s say, five boards because they do have a day job. So it is from a professional development standpoint for those C suite executives, it is actually a good experience for them. But, there are other companies who say you can’t sit on other boards. Like, you know, “you’ve got a day job and you need to focus,”. So, yeah, it really depends on, from a management succession planning perspective, having that experience of seeing another board operate and to learn from them. That’s valuable and you can see how things are working and be able to bring back best practices to your own company.Abraham Kim:
Well, David, you’ve been very generous with your time and I really appreciate the insights you’ve been sharing with us. I wanted to bring our interview to a close here by asking you a final question. I want to take it full circle back to your younger life. If you met your 19-20 year old self, what would you advise the young David?David Chun:
Yeah. I would say, and I got an 18 year-old son, so maybe he’s gonna listen to this. I see in him what I was going through at his age. And, you know, not to be stubborn, right? To listen more. As an entrepreneur, there’s a fine line between hardheadedness, driven, stubbornness, and flexibility, the coachability and listening. And I think at that age, I probably should have listened more and not been as stubborn as I was back then.Abraham Kim:
So be a good listener, that’s the ultimate bottom line.David Chun:
Yeah. But it’s, you know, that’s a yes, be a good listener, but everyone’s going to share advice, right? And it’s being able to– how do you synthesize all of that to really understand, okay, “Of the different opinions ever and all the things I’ve been able to absorb, what’s the right decision there?,” so that decision making process is not an easy one and just really understanding that, yes, you should be listening more, but then also be able to figure out, okay, how do you synthesize and process all that?Abraham Kim:
Well, great words of wisdom. Thank you very much, David. Thanks for your time. We really appreciate you sharing your life with our audience at the Korean American Perspectives. We wish you great success and luck, especially during this time of economic turbulence. I’m sure your company will do very well. So, thank you very much, David.David Chun:
Great. Thank you Abe, appreciate the opportunity.

Abraham Kim:
I hope you enjoyed this interview with David Chun. David’s insights into corporate board governance and strategies to becoming an effective leader prove appropriate at a time like now, when the COVID-19 pandemic is destabilizing so many companies.

Abraham Kim:
Thank you again for listening to this episode of the Korean American Perspectives podcast. As always, we ask that you please subscribe to our podcast and visit our website at councilka.org. Thank you again and hope you tune in next time for the Korean American Perspectives.

Introduction

This week’s episode of Korean American Perspectives features David Chun, CEO and Founder of Equilar, the top provider of critical data on corporate executives, including 70% of the Fortune 500 companies.

Having worked in management consulting, software development, and investment banking, David shares his perspectives on corporate recruitment, compensation and competence at the highest levels of major companies. With his company, Equilar, having a unique view into the makeup of C-suites and board rooms, David discusses current executive hiring trends and the need to fix the lack of gender and ethnic diversity at the highest levels of corporate governance.

If you’ve ever thought about what CEOs are getting paid, why we need to address race and gender pay disparities in major companies, and how you can take the steps to prepare to join a corporate board, don’t miss this insightful and revealing interview with the top corporate data leader in the country.